Changes to legislation from April 2020
Changes to legislation from April 2020
The below information is also useful if you are currently considering setting up a limited company.
As a valued member of the Nurseline family, it is important to us that we do all we can to support you by enabling you, amongst other things, to plan ahead. This means ensuring that you are kept up to date with any changes that could affect the way in which you work.
As you may be aware, there are some legislation changes that are currently planned for implementation in April 2020. These changes are known as IR35.
What is IR35?
- IR35 assesses whether or not someone who is working for a business as a ‘contractor’ is fulfilling the same role as an employee in that business.
- If it is deemed that a contractor is fulfilling the same role as an employee, they are considered to be ‘inside IR35’.
- If a contractor is considered to be ‘inside IR35,’ HMRC views them in the same way as an employee and as such deems them (like employees) liable to pay Income Tax and National Insurance.
- Currently our contractors are able to work ‘outside IR35’ and are not liable to pay income tax and NI (unless that work is within the public sector, such as the NHS – the IR35 rules was applied to the public sector in 2017).
- In April 2020, it is expected that the IR35 rules will be extended to the private sector (with the general election in December, there is a chance that this will change, but all signs indicate that regardless of the election, this extension is highly likely to come into effect).
What does this mean for you?
- Instead of the contractor (you) being responsible for determining their IR35 status, HMRC has put the obligation on the ‘engager’ of the contractor (the client) to determine this.
- Whilst ultimately, the client will determine IR35 status, current information indicates that they will determine that our contractors are ‘inside IR35’.
- Where the contractor is deemed by the client to be ‘inside IR35’, the fee-payer (Nurseline) is obligated to pay employers National Insurance contributions and to deduct both Income Tax and employee National Insurance contributions from the contractor’s pay.
What is Nurseline doing?
We recognise that this change, should it come into effect, could affect the way you choose to work, where you choose to work and your income and we are committed to making the transition as simple and as pain free as possible for you.
- We have assembled a project team who are focused on making the necessary likely preparations for IR35.
- We have instigated discussions with all of our clients and are providing support to them if needed.
- We will keep you updated with the outcome of our clients determinations around IR35 and will communicate the implications of those decisions with you transparently. We will keep you updated with any further information regarding this new legislation and will provide support where we can.
What do you need to do?
Until April 2020, you remain responsible for determining your IR35 status within the private sector and from April 2020, we will inform you of our clients determination.
In the meantime, consider how you might wish to work from April 2020: remain as a limited company, or switch to PAYE.
If you work elsewhere as a contractor, find out now what IR35 status they will decide so you can make the right decision for you.
Consult your accountant or an expert in IR35
Use HMRCs online tool CEST to ascertain whether you should be classed as employed or self-employed for tax purposes:
In summary, whilst we will keep you updated regarding this new legislation and provide support where we can, any financial advice will need to be sought from an expert in the field.
Please do get in touch if anything is unclear – we are here to help.
The Nurseline Healthcare Team